The Journal of Forensic Accounting Profession

Do Big Four Auditors Matter? Evidence from a Comparative Statistical Analysis of Corporate Financial Indicators

2025-09-01T11:13:19+00:00

This paper examines the role of external auditing in explaining differences in financial indicators as key mechanisms for assessing managerial efficiency and the financial health of companies. The focus is placed on the engagement of external auditors, with particular attention to the Big Four audit firms, and the differences in financial indicators among joint-stock companies in Bosnia and Herzegovina. Based on a sample of 143 companies, we analyzed differences in indicators of profitability (ROA, ROE), liquidity (current ratio), leverage (debt-to-equity), and efficiency (asset turnover). Due to deviations from normal distribution, non-parametric statistical tests (Mann–Whitney and Kruskal–Wallis) were applied to identify group differences. The results indicate a significant difference in profitability between companies that are audited and those that are not, but no such difference exists between firms audited by Big Four and those audited by other audit firms. Statistically significantly lower leverage was found among companies using Big Four services compared to other groups, while differences in liquidity and efficiency were not statistically significant. The findings particularly provide empirical support for signaling and agency cost theories, according to which the presence of a reputable external auditor serves as an indicator of transparency and effective corporate governance.

(Previously published on Sciendo: https://sciendo.com/article/10.2478/jfap-2025-0001, pod licencom CC BY-NC-ND 4.0)

The KDD Process in Big Data Analytics: A Theoretical Approach to Taxpayer Non-Compliance Analysis

2025-09-01T11:13:20+00:00

In the modern business environment, big data analytics and data mining techniques are increasingly recognized as tools for improving fiscal discipline and more efficient management of public revenues. This paper explores the possibility of applying the knowledge discovery process from databases to detect patterns of financial behavior that may indicate tax non-compliance. A quantitative approach based on the analysis of secondary data from ten joint-stock companies from the Federation of Bosnia and Herzegovina, for which financial statements and tax debt data are available, was used. The relationship between key financial indicators (EPS, financial stability ratio, total asset turnover ratio and debt ratio) and the amount of tax debt was examined using descriptive statistics and regression analysis. The results show that lower profitability and poorer financial stability significantly correlate with higher tax debt, while high operational efficiency and debt have a more complex and statistically marginal impact. The findings confirm the possibility of using publicly available financial data for early identification of risky taxpayers, which opens up space for further development of predictive models in the domain of tax analytics.

(Previously published on Sciendo: https://sciendo.com/article/10.2478/jfap-2025-0002, pod licencom CC BY-NC-ND 4.0)

The Impact of Forensic Accounting Techniques in Mitigating Electronic Fraud in Nigeria’s Deposit Money Banks

2025-09-01T11:13:21+00:00

In this paper, we examined the impact of Forensic Accounting Techniques (Investigative Accounting, Digital Forensics, and Data Analytics) in mitigating Electronic Fraud (e-fraud) in Nigeria’s deposit money banks (DMBs). The study used a positivist deductive approach and was conducted quantitatively through an online survey. A stratified random sampling method was employed to select a sample of 95 respondents, representing eight ‘best-fit’ groups, including staff from operations, Information Technology, and Electronic Channel departments of five participating Deposit Money Banks, as well as accountants, auditors, representatives from bank regulators, professional accounting bodies, and law enforcement agencies in Nigeria. The results showed that only investigative accounting is statistically significant in reducing electronic fraud within banks. In contrast, digital forensics and data analytics did not show statistical significance in mitigating electronic fraud, implying they do not reduce e-fraud severity. It is suggested that if the scope of data analytics were expanded, it could help mitigate e-fraud, as it shows significance at a 10% level. The findings also indicate that a more refined model, possibly a longitudinal study, could provide deeper insights into the effect of forensic accounting techniques in combating electronic fraud within Nigeria’s Deposit Money Banks.

(Previously published on Sciendo: https://sciendo.com/article/10.2478/jfap-2025-0003, pod licencom CC BY-NC-ND 4.0)

Tax Abuses as an Ethical Issue

2025-09-01T11:13:21+00:00

This paper analyses tax abuses in the Federation of Bosnia and Herzegovina (FBiH), focusing on the shadow economy and undeclared work. The research aimed to identify the most widespread forms of tax evasion and the sectors in which they are most prevalent, as well as to examine the role of the Code of Ethics in combating these negative phenomena. The research findings show that the construction, hospitality, retail, and service sectors are the most affected by the shadow economy and undeclared work. The lack of consistent application of the Code of Ethics and legal regulations further contributes to the proliferation of these practices and undermines economic development and social stability. Recommended measures to combat tax evasion include strengthening monitoring and control, consistently applying the law, educating and raising public awareness, and promoting formal employment. Through the combined efforts of all relevant stakeholders - authorities, regulators, employers, employees, and civil society - significant progress can be made in reducing the shadow economy and undeclared work, promoting fair business practices, and achieving sustainable economic development.

(Previously published on Sciendo: https://sciendo.com/article/10.2478/jfap-2025-0004, pod licencom CC BY-NC-ND 4.0)

Forensic Accounting and Investigations in the Fight Against Money Laundering

2025-09-01T11:13:22+00:00

In the context of increasing challenges in the fight against financial crime, this paper analyzes the significance of forensic accounting in identifying suspicious transactions within the financial sector, with the aim of strengthening efforts to combat money laundering in Bosnia and Herzegovina (BiH). Money laundering is a complex form of financial crime that can be committed by individuals or large organizations. This form of financial crime is known from individuals to large organizations, and over time, different methodologies for carrying it out have developed. The detection and prevention of money laundering and the financing of terrorist activities in BiH are regulated by the Law on the Prevention of Money Laundering and Financing of Terrorist Activities (“Official Gazette of BiH,” No. 13/24), as well as the Rulebook on the Implementation of the Law on the Prevention of Money Laundering and Financing of Terrorist Activities (“Official Gazette of BiH,” No. 41/15 and 24/23). This paper aims to identify weaknesses in the financial and regulatory oversight systems in BiH. It also explores the level of understanding of forensic accounting techniques and money laundering mechanisms within organizations in the country, and assesses their impact on the overall effectiveness of anti-money laundering efforts.

(Previously published on Sciendo: https://sciendo.com/article/10.2478/jfap-2025-0005, pod licencom CC BY-NC-ND 4.0)